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Intrinsic Value Global Strategy
Ariel International Fund

Why Ariel’s global approach


Experience matters

  • Rupal J. Bhansali has more than 30 years of industry experience

Managing risk is a top priority

  • We pay as much attention to risk management as to return management

Screening out provides a stronger starting point

  • While others screen in, we begin our process by screening out high-risk companies

All-cap portfolios offer larger opportunity set

  • Although our portfolios are relatively concentrated, we consider companies of all sizes

Attention to business models builds more resilient portfolios

  • In addition to applying our financial models, we consider the long-term viability of each company's business model


Key Facts
Investment Style:
International all cap, intrinsic value
Market Cap: All cap
Inception:
Investor Class: 12/30/2011
Institutional Class: 12/30/2011
Number of companies: 50-150
Turnover: typically 25-40%
Ticker Symbol:
Investor Class: AINTX
Institutional Class: AINIX
Fund Assets (all classes):
$732.8 million as of 6/30/2022
 
Portfolio Manager
Bhansali_Rupal_Web.png Rupal J. Bhansali
Portfolio Manager
 

Our global investment philosophy


Patience

We take the long-term view.
  • Emphasis on higher absolute and relative returns over a full market cycle with less risk
  • Focus research as much on what can go wrong as what can go right

Independence

We invest to our convictions, not to benchmarks.
  • Benchmark aware only to the extent that tracking error is by design and not by default
  • Significant exposure to our highest-conviction ideas, tempered with prudent risk controls

Expertise

We specialize in bottom-up fundamental research.
  • Focus on connecting information versus collecting information
  • Take business analyst approach rather than financial analyst approach
  • Have extensive interactions with management teams around the world
  • Research a company's global peers to fully inform our competitive assessment

Teamwork

We work collaboratively with a shared commitment to excellence.
  • Debate best, base and worst case scenarios for every company considered
  • Team members with defined roles vet each stock


Our global process


Negative Screening

Negative screening seeks downside protection
  • Process:
    Screen on risk, not growth rate or valuation
  • Risk management:
    Eliminate over 60% of high-risk stocks in universe
  • Benefit:
    Position for downside protection

Bottom-up Research

Proprietary bottom-up research enables better stock picking
  • Process:
    Analysts perform fundamental research
  • Risk management:
    Assess the prospects and durability of a business franchise
  • Benefit:
    Proprietary insights enable better stock picking

Team Validation

Team validation avoids blind spots in our analysis
  • Process:
    Team debates and stress tests each idea
  • Risk management:
    Incorporate macro and micro factors in scenario analyses
  • Benefit:
    Ideas vetted from multiple perspectives yield more informed final decisions by portfolio manager(s)

Portfolio Construction

Portfolios constructed to manage risks as well as long-term performance
  • Process:
    Seek to own top decile of investment opportunities uncovered
  • Risk management:
    Typically cap security position size at 5% at time of purchase, industry weights at the higher of 25% or 1.5x the benchmark*, hedge currency if practical and cost-efficient
  • Benefit:
    Designed to generate superior long-term, risk-adjusted performance


*Global concentrated typically owns up to 15% at market and has no industry limits.


Ariel International Fund

Sector Weightings (%)

As of June 30, 2022
  Ariel International Fund MSCI EAFE MSCI ACWI ex-US
Financials 18.88 17.67 20.28
Health Care 17.29 13.85 9.80
Communication Services 13.67 5.03 6.50
Consumer Discretionary 12.58 11.30 11.73
Consumer Staples 11.55 10.85 8.93
Utilities 10.89 3.52 3.39
Information Technology 3.91 7.79 11.01
Industrials 2.92 14.86 11.82
Energy 0.48 4.76 6.03
Real Estate 0.08 2.88 2.47
Materials 0.00 7.50 8.04

Sector weightings are calculated based on equity holdings as a percentage of total net assets.

MSCI EAFE Index is an unmanaged, market-weighted index of companies in developed markets, excluding the U.S. and Canada. The MSCI ACWI (All Country World Index) ex-US Index is an unmanaged, market-weighted index of global developed and emerging markets, excluding the United States. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI.

These sectors are the Global Industry Classification Standard (“GICS”). GICS was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) and is licensed for use by Ariel Investments, LLC. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.



Investor Class
Institutional Class
Quarter End
Month End

Ariel International Fund

Investor Class | AINTX

Performance

As of July 31, 2022
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year
To Date
One
Year
Three
Years
Five
Years
Ten
Years
Since
Inception
Ariel International Fund -0.45% -4.09% -9.84% -9.95% 2.85% 0.56% 5.43% 4.40%
MSCI EAFE Net Index 4.98% -4.04% -15.56% -14.32% 3.16% 2.62% 5.79% 5.87%
MSCI ACWI ex-US Net Index 3.42% -4.80% -15.63% -15.27% 2.91% 2.45% 5.04% 5.16%
MSCI EAFE Value Net Index 2.08% -5.82% -10.29% -9.89% 1.63% 0.27% 4.40% 4.41%
MSCI ACWI ex-US Value Net Index 1.33% -5.85% -10.61% -10.00% 1.78% 0.73% 3.80% 3.88%

Ariel International Fund

Investor Class | AINTX

Performance

As of June 30, 2022
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year
To Date
One
Year
Three
Years
Five
Years
Ten
Years
Since
Inception
Ariel International Fund -6.15% -7.57% -9.44% -10.49% 2.07% 1.06% 5.45% 4.48%
MSCI EAFE Net Index -9.28% -14.51% -19.57% -17.77% 1.07% 2.20% 5.40% 5.42%
MSCI ACWI ex-US Net Index -8.60% -13.73% -18.42% -19.42% 1.35% 2.50% 4.83% 4.87%
MSCI EAFE Value Net Index -9.96% -12.41% -12.12% -11.95% 0.18% 0.52% 4.25% 4.24%
MSCI ACWI ex-US Value Net Index -9.06% -11.90% -11.79% -12.77% 0.56% 1.23% 3.76% 3.78%
Expense Ratio Cap: 1.13%
Gross Expense Ratio as of the fiscal year ended 9/30/21: 1.30%*

*Effective November 29, 2016, Ariel Investments, LLC, the Adviser, has contractually agreed to waive fees and reimburse expenses (the “Expense Cap”) in order to limit Ariel International Fund’s total annual operating expenses to 1.13% of net assets for the Investor Class through the end of the fiscal year ending September 30, 2023. Prior to November 29, 2016, the Expense Cap was 1.25% of net assets for the Investor Class. Through January 31, 2014, the Expense Cap was 1.40% for the Investor Class. The Expense Cap has been lowered over time. Contact us for historical information about the Expense Cap.

Investments in foreign securities may underperform and may be more volatile than comparable U.S. stocks because of the risks involving foreign economies and markets, foreign political systems, foreign regulatory standards, foreign currencies and taxes. The use of currency derivatives and exchange-traded funds (ETFs) may increase investment losses and expenses and create more volatility. Investments in emerging markets present additional risks, such as difficulties in selling on a timely basis and at an acceptable price. The intrinsic value of the stocks in which the Fund invests may never be recognized by the broader market. Ariel International Fund is often concentrated in fewer sectors than its benchmarks, and its performance may suffer if these sectors underperform the overall stock market. Investing in equity stocks is risky and subject to the volatility of the markets.

Performance data quoted represents past performance. Past performance does not guarantee future results. All performance assumes the reinvestment of dividends and capital gains. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted.

The MSCI EAFE Index is an unmanaged, market-weighted index of companies in developed markets, excluding the U.S. and Canada. The MSCI EAFE Value Index captures large and mid cap securities exhibiting overall value style characteristics across Developed Markets countries around the world, excluding the US and Canada. The MSCI ACWI (All Country World Index) ex-US Index is an unmanaged, market-weighted index of global developed and emerging markets, excluding the United States. The MSCI ACWI ex-US Value Index captures large and mid cap securities exhibiting overall value style characteristics across 22 Developed and 25 Emerging Markets countries. Investors cannot invest directly in an index. All MSCI Index net returns reflect the reinvestment of income and other earnings, including the dividends net of the maximum withholding tax applicable to non-resident institutional investors that do not benefit from double taxation treaties. MSCI uses the maximum tax rate applicable to institutional investors, as determined by the companies’ country of incorporation. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI. Source: MSCI.

Click here for a fund prospectus.



Ariel International Fund

Schedule of Holdings

As of June 30, 2022
  Units Security Description Market Value % of Total Value
BELGIUM     3,996,912 0.5
  71,237 KBC Group NV 3,996,912 0.5
BRAZIL     13,820,010 2.0
  780,942 Telefonica Brasil SA ADR 7,075,335 1.0
  836,511 BB Seguridade Participacoes SA ADR 4,132,364 0.6
  215,005 TIM SA of Brazil ADR 2,612,311 0.4
CANADA     3,216,744 0.4
  308,539 Element Fleet Management Corp. 3,216,744 0.4
CHINA     35,392,699 4.8
  218,091 Baidu, Inc. ADR 32,436,674 4.4
  1,013,353 TravelSky Technology Ltd. 1,968,127 0.3
  35,989 Trip.com Group Ltd. ADR 987,898 0.1
DENMARK     7,038,916 0.9
  1,097,140 H Lundbeck A/S, Class B 5,328,376 0.7
  274,285 H Lundbeck A/S, Class A 1,316,250 0.2
  3,555 Novo Nordisk A/S 394,290 0.0
FINLAND     18,276,562 2.5
  3,097,680 Nokia Corp. 14,411,566 2.0
  838,394 Nokia Corp. ADR 3,864,996 0.5
FRANCE     57,204,187 7.8
  1,210,532 Michelin (CGDE) 32,951,288 4.5
  199,646 BNP Paribas SA 9,491,221 1.3
  84,379 Sanofi 8,518,862 1.2
  30,016 Thales SA 3,681,839 0.5
  15,542 Safran SA 1,534,421 0.2
  18,766 Societe BIC SA 1,026,556 0.1
GERMANY     95,471,742 13.0
  337,667 Deutsche Boerse AG 56,475,758 7.7
  9,940,659 Telefonica Deutschland Holding 28,543,439 3.9
  38,887 Muenchener Rueckversicherungs-Gesellschaft AG 9,136,516 1.2
  26,366 Fresenius Medical Care AG & Co. KGaA 1,316,029 0.2
HONG KONG     9,901,724 1.3
  1,193,500 CLP Holdings Ltd. 9,901,724 1.3
ITALY     35,413,348 4.9
  5,833,381 Snam SpA 30,559,345 4.2
  833,826 Italgas SpA 4,854,003 0.7
JAPAN     101,207,770 13.9
  1,647,500 Subaru Corp. 29,281,738 4.0
  702,800 Bridgestone Corp. 25,640,183 3.5
  50,400 Nintendo Co., Ltd. 21,797,406 3.0
  225,600 Secom Co., Ltd. 13,938,715 1.9
  204,700 Japan Tobacco, Inc. 3,539,403 0.5
  109,300 Sankyo Co., Ltd. 3,306,873 0.4
  74,200 Ono Pharmaceutical Co., Ltd. 1,904,219 0.3
  47,400 Mabuchi Motor Co., Ltd. 1,220,983 0.2
  6,700 Daito Trust Construction Co., Ltd. 578,250 0.1
LUXEMBOURG     3,081,174 0.4
  73,800 RTL Group 3,081,174 0.4
NETHERLANDS     29,541,916 4.0
  1,133,958 Koninklijke Ahold Delhaize NV 29,541,916 4.0
PERU     12,235,257 1.7
  102,037 Credicorp Ltd. 12,235,257 1.7
PORTUGAL     765,532 0.1
  35,222 Jeronimo Martins SGPS SA 765,532 0.1
SINGAPORE     962,138 0.1
  141,300 Singapore Exchange Ltd. 962,138 0.1
SPAIN     38,033,138 5.2
  1,829,311 Endesa SA 34,506,476 4.7
  477,347 Tecnicas Reunidas SA 3,526,662 0.5
SWITZERLAND     61,766,125 8.4
  158,719 Roche Holding AG 52,961,753 7.2
  86,102 Novartis AG 7,292,041 1.0
  12,581 Nestle SA 1,468,629 0.2
  517 Novartis AG ADR 43,702 0.0
UNITED KINGDOM     92,084,747 12.7
  2,190,737 GlaxoSmithKline plc 47,084,746 6.4
  10,197,959 Direct Line Insurance Group plc 31,245,979 4.3
  177,004 Admiral Group plc 4,835,079 0.7
  3,011,870 Vodafone Group plc 4,643,799 0.6
  165,534 Close Brothers Group plc 2,065,422 0.3
  15,386 Reckitt Benckiser Group plc 1,155,603 0.2
  40,071 St. James's Place plc 537,782 0.1
  7,815 AstraZeneca plc ADR 516,337 0.1
UNITED STATES     56,535,887 7.7
  487,664 Philip Morris Intl, Inc. 48,151,943 6.6
  68,845 Check Point Software Technologies Ltd. 8,383,944 1.1
Total Equities     675,946,528 92.3
Short Term Investments      
  22,285,857 Northern Institutional Treasury Portfolio 22,285,857 3.0
Foreign Currency and Other Assets less Liabilities 34,603,437 4.7
Grand Total     732,835,822 100.0%



Past performance does not guarantee future results. © Ariel Investments, LLC. This website and all of its content is for informational and educational purposes only and should not be considered to be investment advice or a recommendation to buy or sell any particular security. The mutual funds offered by Ariel Investment Trust are distributed by Ariel Distributors, LLC, a wholly-owned subsidiary of Ariel Investments, LLC. Use of this website is subject to our Terms & Conditions. The Ariel mutual funds referred to in this site may be offered only to persons in the United States. This web site should not be considered a solicitation or offering of any investment products, funds or services to ineligible investors, investors for whom such products, funds or services are not suitable, or investors outside the United States.

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